Dear Uber: We Agree, Let’s Support Drivers
by Bob Dougherty, Director of Buckle’s advocacy platform, Buckle CARES
If you read the news, you probably think the millions of independent contract drivers and delivery people working for Uber, Lyft, Doordash, Postmates and the like are universally aligned and clamoring for full-time employee status. The truth couldn’t be further from that false narrative.
A 2020 survey from The Rideshare Guy found that more than nearly three out of four drivers support the current independent contractor model, which isn’t surprising given that roughly 90% of drivers are part-time gig workers. As the first auto insurer exclusively for rideshare drivers, Buckle talks to these gig workers every single day. We know these drivers take tremendous pride in being entrepreneurs, often supplementing the rigidity of a regular job with the freedom of being their own boss and owning their own outcomes. Gig work is rapidly becoming the zeitgeist of the 21st century workplace – according to a 2018 Gallup report, nearly 36% of Americans have a gig work arrangement in some capacity.
Unfortunately, the loudest and most motivated voices, backed by big labor, are drowning out this silent but growing majority.
Clearly, there are unsustainable issues with the current model, but the solution is not to force this square peg into the round hole of a 20th century big labor model. The pace of change in technology requires a new approach.
Since the first Uber ride 10 years ago, “app work” has exploded far beyond ridesharing. Everyday people are now able to easily earn extra income as delivery drivers, hoteliers, personal shoppers, mail carriers, dog walkers, in-home handymen, and many more – all under the independent contractor model. The current legal battle with Uber and Lyft is just the prelude – it is only a matter of time before regulators and state assemblies catch up with the other platforms.
In his recent op-ed in the New York Times, what Mr. Khosrowshahi neglected to mention is that the issues go beyond just benefits. Modern insurance and credit markets were built on the strict division of personal and commercial activity, but gig work doesn’t fit neatly in either paradigm. As a result, gig workers are faced with a dilemma: choose affordable personal products that exclude commercial activity, or commercial products that are unaffordable for only part-time work.
Choose affordable, and you spend more time worrying if you’re covered than if you’re being productive. Unfortunately, stories of denied claims, such as this Fort Collins Grubhub driver, are only becoming increasingly prevalent.
Choose commercial, and expenses go through the roof. While there is plenty of controversy over what gig work pays, there is little controversy over the costs of doing it. The IRS standard mileage deduction for the business use of a personal vehicle is $0.58 per mile, and the lion’s share of a rideshare driver’s costs of goods sold are the cost of financing the vehicle – insurance, depreciation and interest.
So, what is the solution? First, acknowledge the silent and growing majority – most gig workers prefer the independent contractor model. Second, build Mr. Khosrowshahi’s “third way,” including affordable hybrid products that bridge the gap between personal and commercial.
Buckle is working hard to do its part. We provide rideshare drivers affordable options for both vehicle financing and auto insurance, covering them whether they are “app on” or “app off.” Our products dramatically lower their cost of goods sold and maximize their net income, all while providing peace of mind through complete and easy to understand coverages.
Our hybrid commercial products satisfy all three parts of California’s ABC Test, protecting gig workers’ freedom to choose where, when, and how they work – to fit work around their life, not their life around work. Furthermore, in accordance with federal tax law as 1099 independent contractors, gig workers receive Schedule C deductions of their mileage, car washes, cell phones, and with COVID-19, their personal protective equipment. Such deductions would not be available to gig workers under a W-2 framework.
Knowing we can’t do this all alone, we partner with industry and federal and state government to fill in the gaps through our driver advocacy platform, Buckle CARES, which assists gig workers and their families in accessing the education, resources, and support services available to them as a small business interest. Buckle Members received on average more than $2,700 of government COVID-19 aid through the SBA’s Economic Injury Disaster Loan program, providing much needed relief at a difficult time for many. To receive such aid, all these recipients attested to the federal government that they are independent contractors – which their tax returns reflect.
There is plenty of noise and distractions in this emerging sector of the economy, but at Buckle, we always return to the same foundational question which guides every decision we make – what is best for the drivers?
Certainly not forcing them into a work arrangement the vast majority have purposefully spurned. Legitimacy is not founded in compulsion. Let drivers remain independent contractors, but recognize their needs, build them affordable hybrid solutions, and empower trusted advocates to keep the whole system honest, productive, and mutually rewarding.
Bob Dougherty is the Director of Buckle’s advocacy platform, Buckle CARES. Buckle CARES facilitates the socioeconomic success of our Members, their families, and the greater gig community through advocacy, resources, and support services. In doing so, we hope to be the preeminent leader of change on issues affecting the gig economy.
He is a career Army officer and veteran currently serving in the U.S. Army Reserves and a graduate of Princeton University.